In Testing for Unrecorded Retirements of Equipment, an Auditor Most

question 24

Multiple Choice

In testing for unrecorded retirements of equipment, an auditor most likely would:

• A)select items of equipment from the accounting records and then locate them during the plant tour.
• B)compare depreciation journal entries with similar prior-year entries in search of fully depreciated equipment.
• C)inspect items of equipment observed during the plant tour and then trace them to the equipment subsidiary ledger.
• D)scan the general journal for unusual equipment additions and excessive debits to repairs and maintenance expense.

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Definitions:

Oral

relates to spoken rather than written communication, often used in contexts such as contracts, agreements, or testimonies.

Enforceable Legal Agreement

A contract or agreement that is valid under the law and can be upheld and compelled through legal action.

Special Accounting Software

Customized software solutions designed to meet the unique accounting and financial management needs of specific businesses or industries.

Parol Evidence Rule

The rule that states that evidence of oral statements made before signing a written agreement is usually not admissible in court to change or to contradict the terms of a written agreement.